Jul 2, 2015
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Grocer Morrisons shows tentative recovery

Jul 2, 2015

Britain's No. 4 supermarket chain, gained market share over the last three months, industry data showed on Tuesday, the first time it has done so since December 2011.

Market researcher Kantar Worldpanel said Morrisons' total sales rose 0.6 percent over the 12 weeks to June 21, while its market share edged up 0.1 percentage point to 11.0 percent.

Since March, Morrisons has had a new boss, former Tesco (TSCO.L) executive David Potts. He has cut prices and improved customer service.

Morrisons was the only one of Britain's "big four" grocers to record a sales rise, Kantar said.

Market leader Tesco and No. 3 player Sainsbury's (SBRY.L) both saw sales fall 1.3 percent, while sales at No. 2 Asda (WMT.N) dropped 3.5 percent.

All of the big four have been cutting prices and stepping up service in an effort to attract shoppers lost to discount rivals Aldi and Lidl.

All players are also having to deal with commodity-driven deflation and a shift in customer habits away from big weekly shops at large out-of-town stores.

Aldi's sales rose 15.4 percent over the 12 week period, giving it a record high market share of 5.5 percent. Lidl's sales increased 9.1 percent, giving it a share of 3.9 percent.

The Kantar data focuses on total sales. On Friday Tesco posted a better than expected 1.3 percent fall in first-quarter sales at stores open over a year.

Sales in the overall UK grocery market fell 0.1 percent over the 12 weeks, Kantar said.

"Sales volumes are up 2 percent compared to a year ago but are not anticipated to accelerate, even with an improving economy, as demand for groceries has remained broadly steady since before the recession," said Fraser McKevitt, Kantar Worldpanel's head of retail and consumer insight.

Grocery deflation over the 12 weeks was 1.7 percent.

(Reporting by James Davey; Editing by Mark Potter)


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